June Swoon For TCI As Activist Falls 12.5%

Jul 15 2008 | 10:08am ET

The equities markets salted The Children’s Investment Fund’s wounds in June, sending the London activist hedge fund to its worth monthly performance ever.

Already reeling from its highly-publicized defeat in its battle with Japanese electric utility Electric Power Development Co., better known as J-Power, plummeting equities markets sent TCI into a 12.5% tailspin last month, the Financial Times reports. The decline erases some US$1 billion in assets and leaves TCI—which has enjoyed average annual returns in excess of 40% in its five years of existence—in the red for the first half.

TCI, which has a highly-concentrated portfolio and uses little hedging, was battered by falling equities markets in June. One investor told the FT that some of the stock picks the fund made during the month have not worked out.

“Unfortunately some things that seemed cheap got even cheaper,” he said.

Prior to last month, TCI’s worst month was May 2006.

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